Mobile Order & Pay -- the Ultimate Brand Experience (Just Ask Starbucks)
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It’s long been said that life is fleeting, and increasingly that includes the interactions that make us loyal.
The best experiences today come not in minutes, not in seconds, but in milliseconds. Consumers demand it, and retailers are scrambling to find newer, more beguiling ways to oblige. In short, saved time is as relevant as personalization.
This is evidenced in a recent story about Starbuck’s digital order-ahead service, called Mobile Order & Pay. With it, a customer can place an Iced Caramel Macchiato order by phone in advance and find the beverage waiting for her when she arrives at the café. The clear message: Make the coffee wait, not the customer.
Photo credit: Starbucks
Increasingly, it seems as if every major brand is investing in similar new forms of digital technology to heighten customer experiences. But let’s face it, these efforts are really just about saving time. In fact, many of today’s shopping apps wrap themselves in the cloak of experience or loyalty when in reality they are simply winding themselves around the demands of the clock. Time is always at the root of these investments. It’s evidenced in Nordstrom’s curbside pickup tests, as well as Amazon and Macy’s same-day delivery trials.
When a brand makes it easy for the customer to get offers, transact, redeem rewards and the like, it is essentially saving the customer time.
In short, relevance is a time saver.
Make time short, see sales grow
This is not to reduce the importance of experience and loyalty. But ultimately if a brand interaction lacks the (reduced) time dimension, then it may be missing the fundamental ingredient that would make technology work for the brand.
Howard Schultz, the CEO of Starbucks, told analysts that his company’s investment in digital technology, including Mobile Order & Pay, has contributed to 4 percent traffic growth in the third quarter. And the program has yet to see full potential: Mobile Order & Pay’s rollout, to 4,000 locations, took place in just the last few weeks of the third quarter.
“Mobile Order & Pay is enabling us to serve more customers more quickly and efficiently and to significantly reduce attrition off the line,” Schultz said. “We are already seeing positive impact on operating results.”
He added that the initiative is contributing to revenue and profit growth in every market it is available, not only because it reduces incidents of consumers walking away from busy stores, but also by increasing purchase options.
Not surprising, then, that mobile payments now represent 20 percent of all Starbuck’s in-store transactions in the United States, more than twice the figure of two years ago. That’s nearly 9 million mobile transactions a week.
Be loyal, earn time
Tying this all together is Starbuck’s reward program, called My Starbucks Rewards, which emerged from an earlier payment-card system. My Starbucks Rewards is now a 10 million-member example of technology working for the brand by saving time.
This is because Starbucks customers need to be reward members to use Mobile Order & Pay and mobile payment – and millions of people are signing up every year. (Note, non-rewards members can still sign up for the Starbucks app, but do not have access to mobile payment features.) Starbucks’ 10.4 million membership number represents a 28 percent increase from one year ago. More than half of those members (6.2 million) are gold tier, making at least 30 purchases in a calendar year.
Save these valuable members an extra five to 10 minutes in a day, and those 30 purchases can become 50. Do the math and that shakes out to an additional 124 million purchases a year. Now consider if those purchases averaged $3 apiece.
That’s almost $375 million, all in return for a simple, time-saving app. But to the consumer, the experience of carrying away that awaiting Skinny Peppermint Mocha, with her name scrawled on the side of the cup, transcends dollars. It carries over to loyalty.
By Bryan Pearson
By Bryan Pearson